The Three Year
Attribution Rule applies when the money is taken out too early and the government thinks that the spouses are in cahoots to use this retirement - planning tool as a way to lower their tax bill instead of saving for retirement.
Basically higher income spouse is funding lower income spouses trading account legally via the pass through of the TFSA without the income
attribution rules applying.
First, I understand there is a three - year period of non-contributions to any spousal RRSP before the spouse can withdraw the money without
attribution rules applying.
Not exact matches
The rush to beat the Oct. 1 deadline is that in order to avoid the
attribution rules from
applying to a spousal loan such as this one, you need only use the prescribed rate in effect at the time the loan was originally extended.
Since returns in the form of interest, dividends and capital gains are sheltered from tax, the
rules of
attribution do not
apply.
First,
attribution rules still
apply if the child withdraws from the policy before the age of 18.
There are
rules that
apply to intent, if the entry intent is to use the TSFA to move monies around just to avoid the
attribution.
Jonathan Chevreau notes that the TFSA allows income splitting because
attribution rules do not
apply for income earned within the account.
The
attribution rules won't
apply if you are paid interest on the loan at the prescribed rate in effect at the time the loan is made.
There are exceptions where the spousal
attribution rule wouldn't
apply, such as if Ella died the year the funds were being withdrawn.
«
Attribution»
rules apply if you do that.
A key benefit of the TFSA is that it allows single - income couples like the Delperos to avoid the «
attribution rules» that normally
apply when you give your spouse money.
But inadvertent plagiarism — plagiarism resulting from failure to understand or properly
apply legal citation and
attribution rules — presents a different problem.